Capital One: 11-Month 360 CD Expired

Anyone that has done this deal, is capital one holding your money for 13 days for processing? I transferred money from chase and cap1 says it will take 13 days to set up the cd

After looking into this for some time , I ended up going a different solution.

So Fidelity allows their brokerage accounts to be used like a bank account (comes with checks, debit cards, account/routing numbers, accepts direct deposits, etc. Exactly like a bank account, because they actually make it into a bank account on the back end).

Anyways, I have a separate brokerage account that is my "bank account" paying all of my credit cards/bills. The "core position" is just the default SPAXX, which is currently receiving 4.02% 7 day yield with a 0.42% expense ratio, and is made up of 72% "U.S. Government Repurchase Agreements."

Tbh, idk the difference between repurchase agreements and tbills, but let's say SPAXX has a net of 3.5% vs this whole tbill/savings account thing with 5.0%. That's a 1.5% difference, but comes with a lockup period, some minor management, can't pay credit cards/bills with it, limitations on transactions, etc.

At $100k cash, thats only $1.5k extra, for a whole lot of inconvenience.

Anyone have opinion on this method vs laddering?

We pay for 90% of everything we buy with a credit card, pay it off every month. Haven't paid interest on anything for 15 years. We will never need a mortgage or a car loan.

Does it matter ? It's an 11 month CD

If you have beneficiaries listed then each get $250k coverage as well

I commend you for your discipline. When you keep taking out loans and pay interest that ultimately means you are paying extra and will be able to buy less overall. Years ago I decided I would never take out another car loan and forced myself to save up and pay cash for my new car and that's what I've done ever since, no loans. I looked at it as buying freedom, I'm no longer stuck at a job I don't enjoy because I need a check.

Setting up a fidelity acct today. What days are the auctions on or link for schedule?

You can buy the 4-week and 8-week now. See attached Fidelity screenshot
The 13-week will be announced on the 9th [treasurydirect.gov].

There is discipline and there is economic sense.

If somebody is of the type that they will keep borrowing and insanely spend and get into trouble, then what you are doing is absolutely the right thing to do - never get into trouble.

However, if somebody is disciplined and pays their bills all the time, then it all boils down to what you earn and what you pay. If a car company is offering me 2.9% for 5 years and I can easily make 2.9% in investments, then all those comments about "pay interest and utlimately pay extra" are not applicable. Obviously, the situation is a bit more complex - if the car company has a rebate in liu of the financing, that has to be included in the calculation. Also interest earned is taxable but interest paid is generally not taken off the taxes. So it is not an easy decision but simply looking at it as paying interest is wrong.

My county charges 2.3% for credit card fees for property taxes. However, if I get a new credit card that has a spend bonus and I can easily meet the spend bonus with the property taxes, it is absolutely worth it if the bonus is big enough. Same thing applies for IRS - there are credit card companies that charge 1.87% for paying IRS by credit card. On surface, that seems bad but if I have a credit card that gives me 2%, then charging to the card is the better option. Bottomline - there should be no black and white rules when it comes to managing money - just do quick thinking to understand what is a better option. Unfortunately - the car thing I mentioned above is not quick thinking but a lot of other things are.

If the federal government actually defaults on treasuries, then there are really much bigger problems for you to worry about, as any dollar-denominated assets would be put at risk. Keep in mind that the treasury can literally print additional money to make these payments. For all of the posturing that happens every year or two on the debt limit, no one in finance takes the threat of default seriously.

I noticed the 4 and 8 week are marked RI which means "reopened issues." Then when you select those two, they have a 12/22 start date. Is that a concern? The 17 week had a more current date.

treasurydirect.gov and you can get an Series I bond up to $10K that yields about 6-7% now. Google search I Bond to research that if you're interested.

https://www.treasurydirect.gov/sa...est-rates/

What's the penalty for early withdrawal? Loss of all the interest earned?

Edit: I found the answer.

Early Withdrawal Penalty: If you redeem a Certificate of Deposit (CD) prior to maturity, you will incur an early withdrawal penalty.

For a CD with a twelve (12) month or shorter term, the penalty is three (3) months interest, regardless of when you redeem the account prior to maturity.
For a CD with a term greater than twelve (12) months, the penalty is six (6) months of interest regardless of when you redeem the account prior to maturity.
If any Certificate of Deposit owner dies or is declared legally incompetent, the Certificate of Deposit can be redeemed early, without penalty.

Depending on how early you redeem your CD, the penalty for early redemption may be greater than the interest you have earned on your account.

Other banks offer better. e.g. PNC bank savings is 4.0% APY. Redneck bank is 4.25% APY for upto 75K. I would not stick with Sofi